Application Of Depreciation Methods In Cost Of Fixed Assets In Selected Commercial Banks In Damaturu, Yobe State, Nigeria

Abstract

This study aims at analysing the various ways of charging depreciation, its
applicability and its significance to some selected banks in Damaturu, Yobe
State capital. And at the same time, the effect of non-charging depreciation on banks profitability and the effects of adhering traditionally to some particular methods, the pros and cons of the methods in use. Above all, the paper tends to stimulate the readers at a glance, the adopted suitable methods of depreciation for the purpose of maintenance, renewal and replacement of fixed assets. The methodology used in this research for the data collected is the survey method, where a stratified random sampling was applied on some staff of Bank PHB, UBA Group and Oceanic Bank International Plc as the recognition of the fact that the three has the common trait of dealing with the treatment of the fixed assets. The study revealed that companies would be declaring more profits if suitable methods of depreciation are properly applied. Based on the findings of this study, it was recommended among others that companies should be objective in their choice of the methods and rate of depreciation to be applied to avoid using the wrong method or understating the rate as the case may be.